Selling a Home in 2018? Hahahahahahaha
Why you’ll pay a lot more in capital gains
If the Senate or House tax bill gets to a real vote after reconciliation, homeowners ready to sell have a real surprise coming.
Under current law, a couple who sells their home is able to exclude up to $500,000 in capital gains from their gross income, as long as they used the home as their principal residence for two of the past five years. Under the new plan, they’d need to use it as their principal residence for five of the past eight years to qualify. Instead of being able to use that exclusion every two years, they’d be able to use it only every five years.
High-income homeowners might not be able to use the exclusion at all. Under the bill, the exclusion would be phased out by a dollar for every dollar a joint tax filer’s adjusted gross income exceeds $500,000.
And, here is another bad part of the bill, there is NO phase in. This would take effect 1/1/18.
NAR and other housing groups need to add this to their call to action. It is not just the interest and real estate tax deduction that could hurt people, the capital gain issue could make things even worse.
If may make people take on more debt on their new house because they don’t have as much cash to put down and/or it could prevent people from selling because they can’t afford to.
This tax deal is garbage. It is 100% for the political donor class.
Let’s start to change the tax laws so companies can repatriate funds at a one time lower rate. If that works, we can look at other items. That is the one thing that needs fixing. Then, add tax credits that get repaid in 5 years for adding jobs. Simple stuff.
Leave real estate alone!